Farm Bill Proposal Makes Crop Insurance Cuts


by Chris Clayton, DTN Ag Policy Editor

OMAHA (DTN) — Critics may argue that House Budget Chairman Paul Ryan’s budget proposal has little chance of passage, but the document puts more pressure on the House Agriculture Committee to cut crop insurance subsidies when writing the farm bill.

In a document crafted to set up an election-year contrast, Ryan, a Wisconsin Republican, released a budget proposal that would cut $5.3 trillion more out of the federal budget over the next decade than a proposal released last month by President Barack Obama.

Included in the Ryan proposal are recommendations to cut $30 billion out of farm programs over 10 years by reducing “fixed payments” and “reform the open-ended nature” of crop insurance.

The “record-breaking prosperity of American farmers and farm communities” demand re-examining federal farm programs “to ensure that taxpayers aren’t funding support for a sector that is more than capable of thriving on its own,” stated the Ryan proposal called “The Path to Prosperity.”

The agriculture cuts would be slightly less than the $32 billion proposed by the president last month. The White House plan drew strong criticism from farm groups because of the proposed cuts in crop insurance.

Crop insurance cuts under the Ryan plan, much like the White House plan, would require farmers to pay higher premiums. As the document states, the Ryan budget calls on the Agriculture Committee to “reform the open-ended nature of the government’s support for crop insurance, so that agricultural producers assume the same kind of responsibility for managing risk that other businesses do.” That language is comparable to the president’s proposal, which called for capping premium subsidies at 50{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}.

The Senate Agriculture Committee, in taking the lead in crafting a farm bill, has been working off a $23 billion budget-cutting proposal over 10 years. That’s the figure the agriculture committees offered to cut in the failed supercommittee talks last fall. Lawmakers criticized the president’s plan to cut more and they have been unwilling to consider cuts in crop insurance due to strong support from farm groups.

House Agriculture Committee Chairman Frank Lucas, R-Okla., issued a statement praising Ryan’s plan, saying it demonstrates that Republicans are willing to tackle the federal deficit. On the farm bill, Lucas said he expects bipartisanship to continue, but added that people should not read too much into the numbers of either Ryan’s plan or the president’s proposal.

“They are only suggestions,” Lucas said in a press release. “During our process, both policy and deficit reduction targets will be developed in conjunction with ranking member (Collin) Peterson and members of the committee as we write a fiscally responsible farm bill that ensures Americans continue to have a safe, affordable, and stable food supply.”

Agriculture Secretary Tom Vilsack was asked in a phone press conference Tuesday morning about the proposed cuts. Vilsack said he had not seen the document, but Vilsack wondered whether there would be comparable criticisms over the crop-insurance elements.

“It will be interesting to see how ag groups that were obviously critical of the president’s budget react to Rep. Ryan’s proposal,” Vilsack said. “Hopefully there will be some consistency in criticism.”

The budget refers to food stamps, unemployment benefits and farm subsidies as “autopilot spending” as part of entitlement programs.

Calling the increase of people on food stamps a trend of “relentless and unsustainable growth,” the budget would convert the Supplemental Nutrition Assistance Program, (the formal name for food stamps) into a block grant tailored to each state’s low-income population, indexed for eligibility beginning in 2015, after employment has recovered. That would cap the federal subsidy while encouraging states to reform their programs. The work requirements would also help cut into the SNAP rolls as well. Last year, Ryan proposed cutting $127 billion from SNAP over 10 years, but did not detail a specific dollar figure this year in his blueprint.

The Senate Agriculture Committee has been looking at cutting about $4 billion from SNAP over 10 years, largely through eliminating some loopholes in eligibility.

SNAP enrollment has gone from 28.2 million people in 2008 to 44.3 million now, and the cost has gone up to a projected $700 billion over 10 years without any cuts.



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Posted with DTN Permission by Haylie Shipp


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